Krystal Crittendon aids others in bankruptcy challenge

Sep. 6, 2013

Krystal Crittendon makes her last push for votes by greeting voters and shaking hands at Henry Ford High School on Aug. 6. She finished third in the Detroit mayoral primary that day. / Andre J. Jackson/Detroit Free Press

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Detroit Free Press Business Writer

When dozens of metro Detroiters go before Judge Steven Rhodes later this month as objectors to the city’s bankruptcy filing, they’ll have more in common than just their standing in federal court. They’ll be there with the help of Krystal Crittendon.

Of the 101 objectors, 66 used a form letter in their filing that was created by the former Detroit corporation counsel.

Crittendon’s behind-the-scenes influence will figure prominently as people who are challenging the city’s eligibility for bankruptcy protection make their cases.

Detroit’s bankruptcy, which could result in the reduction of pension benefits for more than 23,000 retirees, has generated a backlash among some former employees and Detroit residents who resent the the appointment of an emergency manager who was not elected by city residents.

Crittendon’s 11-point objection to Detroit’s bankruptcy case zeroes in on that issue, and is also cited by many others who are challenging Detroit’s decision to file for bankruptcy. One of the objections states that to allow an agent of the state — emergency manager Kevyn Orr — to take the city into bankruptcy without the consent of its elected officials is tantamount to involuntary bankruptcy, which is not allowed under Chapter 9 bankruptcy law.

“To say that I am somehow coordinating it, or I am their leader — that would not be the case,” she said of the people who filed objections. “I am not representing them at all as legal counsel.”

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Crittendon, a Detroit College of Law graduate, has often positioned herself as sticking up for Detroiters who don’t have a voice, both through her role as a lawyer for the city and as a mayoral candidate, in which she finished third in the August primary.

Appointed by former Mayor Ken Cockrel Jr. as corporation counsel, then reappointed by Mayor Dave Bing, Crittendon, 50, for years was a quiet figure in Detroit government. That is, until she challenged the legality of the city-state consent agreement. That challenge landed her in opposition to Bing and Gov. Rick Snyder in an Ingham County court and at city hall.

Crittendon sought a judge’s ruling on whether the consent agreement was illegal because, she argued, the state owed Detroit millions in unpaid bills and revenue sharing, therefore City Council and the mayor could not enter into such an agreement.

The Snyder administration disputed owing the money, and an Ingham County judge twice ruled Crittendon didn’t have the authority to pursue the issue.

Her stance against the EM law and Bing eventually got her removed from her post as corporation counsel. But it also fertilized her popularity, pushing her to run for mayor. She finished third Aug. 6, behind former Detroit Medical Center CEO Mike Duggan and Wayne County Sheriff Benny Napoleon and has since directed much of her time continuing to fight the emergency manager law.

She told the Free Press that a number of people asked her for help and guidance for how to file objections after she spoke at a meeting held by the National Action Network in August.

At that meeting, Crittendon said she planned to challenge the city’s eligibility for bankruptcy, which caused people to tap her legal expertise about the process.

“I did prepare a document, and there are people who asked me if they could see my document,” Crittendon said. “And those people made individual decisions to follow the objections that I filed.” Crittendon also said she received a notice in the mail advising her that she is a creditor in Detroit’s bankruptcy case.

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Some legal experts say Crittendon’s involvement may come across as acting in the best interest of Detroit residents who are creditors but who are not represented by corporate attorneys.

“She is walking a fine line. But nothing she’s done — at least that we know of — seems to be against the law,” said Jocelyn Benson, dean of the Wayne State School of Law.

In fact, Benson said, it could also be argued that Crittendon was acting in the best interest of the City of Detroit by providing guidance to retirees and other individuals who wanted to have a voice in the city’s bankruptcy case. Retirees and other individuals had just two weeks to respond to a notice in the mail to file objections to Detroit’s bankruptcy.

“There is certainly nothing wrong with assisting those who are also creditors,” Benson said.

Doug Foley, a partner and bankruptcy expert with McGuireWoods in Washington, D.C., said it’s not unusual to see a large group of people in a bankruptcy case file objections based on a standardized letter or form.

“In the airline cases I’ve been involved in, a lot of the union members file individual objections,” Foley said. “And then they come to the hearings in mass appearances just to sort of show the human face of what is happening.”

Rhodes has set three dates to hear arguments from people and creditors who are opposed to the city’s bankruptcy. Lawyers representing major creditors are scheduled to present their legal arguments on Sept. 18, and individuals who filed objections will get about three minutes each to speak at a Sept. 19 hearing.

Crittendon said she isn’t advising anybody — aside from her mother and her aunt, who also filed objections to Detroit’s bankruptcy — about what to say when they appear in court.

“People are acting as if I am some kind of queen and these people are my subjects and I am directing and dictating and telling them what to do,” Crittendon said. “The people in this city know when their constitutional rights are being violated. They know when they are being oppressed.”